What is a Public Limited Company?
A public limited company (PLC) is a type of business structure in the UK.
Whilst PLCs are not the most popular company structure - that honour goes to private companies limited by shares - it’s a well-known one, as it's the only structure where its owners can offer shares to the public.
PLCs are commonly used by larger businesses that seek to raise capital from public investors to fund expansion or other major projects.
Who is this structure right for?
- Large Companies Seeking Growth: A PLC is typically chosen by larger companies that need substantial capital for expansion, research and development, or acquisitions.
- Companies Preparing for an Initial Public Offering (IPO): Businesses looking to go public and raise funds from public shareholders often restructure into a PLC before listing their shares on a stock exchange.
- Companies Requiring Large-Scale Funding: Some industries, such as banking, oil, pharmaceuticals, and telecommunications, tend to adopt the PLC structure due to the large amounts of capital needed for operations, expansion, and research.
- Established Businesses Looking to Broaden Ownership: Companies that are already successful in private hands may transition to a PLC structure to give more people an opportunity to invest and own part of the business.
Key Benefits
Limited Liability: Like a private company limited by shares, a public limited company provides its members with limited liability, with each member only being liable for the nominal value of shares that they hold in the company.
Public Trading of Shares: The shares of a PLC can be sold to the public on stock exchanges like the London Stock Exchange (LSE), which enables the company to raise significant capital. This is a major advantage for businesses looking to expand or fund large-scale projects.
Corporate image: Any business that is registered at Companies House as a company is attractive to potential clients and investors, as it projects a professional, well-established image. Public limited companies have an extra level of prestige because they are usually larger corporations.
Features
Minimum Share Capital: A PLC is required to have a minimum share capital of £50,000, with at least 25% paid up before it can begin trading.
Shareholders and Directors: PLCs must have at least two shareholders and two directors, which differs from private limited companies (LTDs) that can be owned and managed by a single person.
Continuity: A public limited company (like the other company types) is a separate legal entity from the people behind it. This means the company can continue to operate whilst the individuals who run and own it change.
Forming a public limited company (PLC)
1st Formations provide a PLC Package with trading certificate for just £119.99. Here is the key information that you need to know about forming and then maintaining a public limited company:
- PLCs must be registered with Companies House and have a unique name.
- PLCs must have a registered office address within the same country it was formed, which is publicly visible.
- A PLC requires at least 2 directors, 1 qualified company secretary (e.g. chartered secretary or accountant), and 1 shareholder, meaning a minimum of 2 people are needed. They must also report any person with significant control (often a shareholder).
- They must also select at least 1 Standard Industrial Classification (SIC) code during registration to define its industry.
- They cannot trade until they obtain a trading certificate. To qualify, the company must allot shares worth at least £50,000, with a minimum of £12,500 paid up. Finally, PLCs adopt articles of association and a memorandum of association during formation.
